FISCAL NOTE

Date Requested: January 15, 2016
Time Requested: 03:38 PM
Agency: Education, Department of
CBD Number: Version: Bill Number: Resolution Number:
1235 Introduced HB4027
CBD Subject: Education (K12)


FUND(S):



Sources of Revenue:

Other Fund N/A

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The estimated cumulative costs to the State under the Public School Support Program (PSSP) for three years of proposed increases is $91,236,161. The estimated cumulative costs to the County Boards of Education for three years of proposed increases is $2,531,856. The total estimated combined cumulative costs to the State and County Boards of Education for an across the board increase in the basic teacher salary schedule and the basic service personnel salary schedule for three years of proposed increases is $93,768,017.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 30,652,648 93,768,017
Personal Services 0 0 0
Current Expenses 0 29,822,586 91,236,161
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 830,062 2,531,856
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The estimated costs to the State under the Public School Support Program (PSSP) for an across the board increase in the basic teacher salary schedule and the basic service personnel salary schedule includes the estimated increases in Step 1 for professional salaries, Step 2 for service personnel salaries, Step 3 for fixed charges, Step 6 for operations and substitute costs, and retirement. The total estimated costs for a 2% across the board increase for the year 2016-17 is $29,822,586. The portion attributable to professional educators is $22,280,633 and the portion attributable to service personnel is $7,541,953. The total incremental estimated costs for a 2% across the board increase for the year 2017-18 is $30,527,179. The portion attributable to professional educators is $22,834,387 and the portion attributable to service personnel is $7,692,792. The total incremental estimated costs for a 1% across the board increase for the year 2018-19 is $30,886,396. The portion attributable to professional educators is $23,116,676 and the portion attributable to service personnel is $7,769,720. The total estimated cumulative cost to the State for all three years of proposed increases is $91,236,161 ($68,231,696 for professionals and $23,004,465 for service personnel).
    
    The county boards of education would also incur additional costs for the salary increases for the counselors and nurses included in Step 5 of the PSSP since the allowance is fixed at the 2012-13 amount. The estimated cost to the County Boards of Education for the 2016-17 year for a 2% across the board increase for counselors and nurses is $830,062. The additional incremental estimated cost to the County Boards of Education for a 2% per year across the board salary increase for the counselors and nurses for the 2017-18 year is $846,664. The additional incremental estimated cost to the County Boards of Education for a 1% per year across the board salary increase for the counselors and nurses for the 2018-19 year is $855,130. The total estimated cumulative cost to the County Boards of Education for all three years of proposed increases is $2,531,856.
    
    The total estimated combined cumulative costs to the State and County Boards of Education for an across the board increase in the basic teacher salary schedule and the basic service personnel salary schedule for three years of proposed increases is $93,768,017.
    
    Note that the estimated cost to the county boards of education do not include the additional costs for personnel employed in excess of funded, personnel employed in positions not eligible for state aid funding, personnel employed using other funding sources such as state or federal grants, or the cost of extended employment terms for professional personnel.



Memorandum


    Please note that the bill purpose language states "....increase pay to teachers and service personnel by two percent the first year, two percent the second and three percent in the third year." However, the proposed code language states "Beginning July 1, 2016.....an additional two percent. Beginning July 1, 2017.....an additional two percent. Beginning July 1, 2018.....an additional one percent."
    
    The estimates above are based on the proposed code language which states a 2% increase in 2016-17, a 2% increase in 2017-18, and a 1% increase in 2018-19.
    
    The proposed code language is unclear as to whether the percentage increases should be based on the initial salary amount in 2016-17 or if the percentage increases should be incremental and build on each year. Please note that the estimates presented for the percentage increases were calculated incrementally for each year.



    Person submitting Fiscal Note: Brenda Freed
    Email Address: bfreed@k12.wv.us